Establishing Same Cause of Action under Article 27 of the Lugano Convention in Defamation Claims: Comprehensive Analysis of Wright v Granath ([2021] EWCA Civ 28)

Introduction

Wright v Granath ([2021] EWCA Civ 28) is a pivotal case adjudicated by the England and Wales Court of Appeal (Civil Division), which delves into the complexities of jurisdiction under Article 27 of the Lugano Convention. The case primarily addresses two critical questions:

Whether Article 27 applies to defamation claims.
If it does, whether the causes of action in the English and Norwegian proceedings are the same.

Dr. Craig Wright, a claimant asserting his identity as the creator of Bitcoin under the pseudonym Satoshi Nakamoto, initiated libel proceedings against Mr. Magnus Granath, a Norwegian resident who publicly accused him of fraudulence on Twitter. Concurrently, Granath filed a declaration of non-liability in the Oslo District Court, leading to the interplay of Article 27 provisions governing jurisdiction and recognition of judgments between England and Norway.

Summary of the Judgment

The Court of Appeal upheld the initial judge's decision to apply Article 27 of the Lugano Convention, thereby declining jurisdiction over the English defamation claim in favor of the Norwegian proceedings. The court reasoned that the cause of action in both proceedings was sufficiently identical, as both centered on the defamatory tweet alleging Dr. Wright's fraudulent claim to be Satoshi Nakamoto. Despite differences in legal elements—such as the Norwegian claim requiring negligence—these did not negate the core identity of the cause of action. Consequently, the English claim was dismissed to prevent parallel proceedings and potential conflicting judgments.

However, the judgment was not unanimous. Lord Justice Moylan dissented on the first ground, arguing that the English and Norwegian claims did not constitute the same cause of action due to differing legal requirements, such as negligence in the Norwegian claim, which is not a component of English defamation law.

Analysis

Precedents Cited

The judgment extensively examined precedents to interpret the scope of Article 27:

Gubisch Maschinenfabrik KG v Palumbo (Case C-144/86): Established that the same cause of action requires identical facts and legal rules, emphasizing that even if legal issues differ procedurally, the substantive basis must align.
The Tatry (Cases C-406/92 and C-161/10): Highlighted that the cause of action does not need to be identical in all aspects but should revolve around the same core legal issue.
The Alexandros T ([2013] UKSC 70): Reinforced the importance of causes of action mirroring each other to invoke Article 27, stipulating that claims must be "mirror images" and legally irreconcilable to warrant dismissal in favor of the first seised court.
Haji-Ioannou v Frangos ([1999] CLC 1075): Demonstrated that differing legal bases (e.g., tort vs. contract) can result in claims not being deemed the same cause of action.
Easygroup Ltd v Easy Rent a Car Ltd ([2019] 1 WLR 4630): Further illustrated that differing legal elements across jurisdictions (e.g., contract vs. tort) can prevent claims from being considered the same cause of action.

Legal Reasoning

The court's reasoning hinged on dissecting whether the English and Norwegian claims shared the same core cause of action under Article 27:

Same Parties: Both sets of proceedings involved Dr. Wright and Mr. Granath.
Same Cause of Action: Central to this was determining if both claims were based on identical facts and legal principles. While the Norwegian claim incorporated a negligence element—a requirement absent in English defamation law—the court found that the essence remained the same, focusing on the defamatory nature and truthfulness of the tweet.
Same Object: Both claims aimed to resolve liability regarding the defamatory tweet, even though the English claim sought damages and an injunction, whereas the Norwegian claim sought a declaration of non-liability.

The majority concluded that despite procedural and legal differences, the fundamental issue surrounding the defamatory tweet was identical in both jurisdictions, thereby invoking Article 27 to avoid parallel proceedings.

Lord Justice Moylan, in his dissent, argued that the inclusion of negligence in the Norwegian claim altered the legal basis sufficiently to prevent the claims from being deemed the same cause of action. He emphasized the autonomous interpretation of Article 27, asserting that differing legal elements across jurisdictions necessitated treating the claims as distinct.

Impact

This judgment underscores the nuanced application of Article 27 of the Lugano Convention in cross-border defamation cases. It establishes that while legal procedural differences exist, the core issue—such as the defamatory nature of a statement—can bind jurisdictions to prioritize the first seised court to maintain judicial efficiency and consistency in outcomes.

For future cases, especially those involving defamation across different legal systems, this ruling provides a clear framework:

Identifying Core Issues: Courts must focus on the substantive legal issues rather than procedural differences.
Preventing Redundancy: Ensures that plaintiffs cannot pursue identical claims in multiple jurisdictions to exploit favorable legal environments.
Consistency in Judgments: Aims to avoid conflicting judgments by recognizing the jurisdiction of the first seised court.

Additionally, the dissent highlights the importance of scrutinizing whether additional legal elements introduced in a claim alter the fundamental cause of action, suggesting that not all overlapping claims will trigger Article 27.

Complex Concepts Simplified

Article 27 of the Lugano Convention: Governs which court has jurisdiction when the same dispute is brought before courts in multiple Lugano Convention member states. It prioritizes the court first seised to prevent parallel proceedings and conflicting judgments.

Same Cause of Action: Requires that both claims are based on the same facts and legal principles. It doesn't necessitate identical procedures or legal elements but focuses on the core legal issue underpinning both claims.

Mirror Image: A legal metaphor indicating that the claims in both jurisdictions are like reversed reflections—fundamentally seeking to determine the same legal issue (e.g., liability for a defamatory statement).

Lis Pendens: A legal doctrine preventing multiple courts from hearing the same case between the same parties, thereby avoiding duplicated litigation and inconsistent judgments.

Negative Declaratory Relief (NDR): A procedural mechanism allowing a defendant to seek a declaration that they are not liable, effectively establishing jurisdiction in their favor under Article 27 if granted.

Conclusion

Wright v Granath sets a significant precedent in the realm of international defamation litigation under the Lugano Convention. By affirming that English and Norwegian defamation claims over the same defamatory incident constitute the same cause of action, the Court of Appeal reinforced the importance of Article 27 in ensuring judicial efficiency and consistency across jurisdictions.

The judgment emphasizes that while legal systems may have differing procedural nuances and additional legal requirements, the essence of the dispute—such as the defamatory nature of a statement—can unify claims across borders. This prevents plaintiffs from exploiting multiple jurisdictions to secure favorable outcomes and upholds the integrity of cross-border legal processes.

Furthermore, the case highlights the necessity for courts to meticulously analyze the substantive elements of each claim, beyond surface-level procedural differences, to ascertain true legal identity. The dissenting opinion serves as a reminder of the complexities inherent in international litigation, advocating for a balanced approach that respects both the letter and the spirit of international jurisdictional conventions.

Overall, Wright v Granath underscores the critical role of Article 27 in harmonizing international legal disputes, ensuring that justice is both efficient and consistent, and setting a clear standard for future cases involving cross-border defamation claims.